Madigan sets minimums on free care provided by hospitals

Bill would require tax-exempt facilities to spend at least 8% of operating costs

Illinois Attorney General Lisa Madigan proposed a bill that would require hospitals with state tax-exemptions to spend at least 8% of their operating costs on uncompensated care, defined as including Medicaid shortfalls, bad debt and charity care.

Hospitals could count care provided at their clinics as well, and critical-access hospitals would be exempt from the requirement.

Madigan also proposed a second bill that would protect patients from aggressive debt-collection practices.

She said Illinois not-for-profit hospitals provided charity care amounting to less than 1% of their total charges, on average, in 2003. Under the Tax-Exempt Hospital Responsibility Act, hospitals would have to offer free care to uninsured patients earning up to 150% of the federal poverty level and sliding-scale discounts to patients earning between 150% and 250% of poverty level.

The Hospital Fair Billing and Collection Practices Act would require hospitals to provide patients with itemized bills in "clearly understandable language," establish a toll-free line for questions and allow patients to pay bills in installments. The act also would require hospitals to exhaust a claims-resolution process before referring claims to collection agencies.

In a statement, Illinois Hospital Association President Kenneth Robbins said, "The hospital community has serious concerns and many questions" about the proposals. Robbins said Illinois hospitals provide more than $1.2 billion in free care annually. In 2003, the state's hospitals established voluntary guidelines under which they agreed to provide free care to patients earning no more than the federal poverty level and discounted care to patients earning between 100% and 200% of poverty level, Robbins said.